UPDATE 1-Australian Senate passes renewable energy laws

* Amended Australian green energy laws to drive investment

* Passing of new laws boost for govt ahead of elections

By James Grubel

CANBERRA, June 23 (Reuters) - Australia's parliament endorsed revised renewable energy laws on Wednesday in a move aimed at unlocking billions of dollars in clean energy investment and bolster the government's green credentials ahead of elections.

The laws lock in a 20 percent renewable energy target by 2020, and split Australia's renewable energy scheme into large projects and a household market, giving new certainty to up to $19 billion worth of clean energy projects.

(For a factbox on firms likely to benefit, click on: [ID:nTOE65K063])

The laws are a boost for Prime Minister Kevin Rudd, who faces a national election within months.

His popularity has plunged in part because he is perceived to have failed to follow through on a mandate to fight climate change. The government in April shelved plans to introduce emissions trading. Other key policies have also been stalled because of fierce opposition.

"This is quite an historic step," Climate Change Minister Penny Wong told Australian radio earlier on Wednesday.

"It is actually quadrupling Australia's renewable energy use, so that by 2020, the equivalent of all our household electricity use will come from wind and solar and wave and whatever other renewables can come to the market."

She said the new laws improved the renewable energy scheme, and had been negotiated with the industry.

The legislation, which will now be rubber-stamped by parliament's lower house, will take effect from January 2011, and give new certainty to the market for tradeable Renewable Energy Certificates (RECs).

The laws were introduced because the value of RECs had plummeted because the government used the scheme to reward households that installed solar hot water panels and heat pumps, flooding the market with cheap certificates and reducing their worth to large-scale projects.

(For a factbox on the scheme, click on: [ID:nSGE61P01C])

Growth in Australia's renewable energy sector had slowed as big project developers waited for certainty, with an A$800 million wind farm development by the country's largest energy retailer, AGL Energy (AGK.AX), put on hold until the laws passed.

Under changes by the Senate, the government will review the clean energy laws every two years, to take account of potential new technology.

Government amendments also allow for the scheme's renewable energy target to be temporarily raised in 2012 and 2013 to absorb a possible boom in RECs generated from household solar panels.

That will help support the value of RECs which are bought by carbon-producing power generators and designed to help the country meet the renewable energy target.

The higher the REC price, the better the returns for investors in wind, solar power, geothermal and other projects, with investors saying proposed wind farm projects are only viable if the REC price is around A$65, against a current price below A$40. ($1 = 87 U.S. cents) (Editing by )